Zhang v Misitano; Misitano v Zhang

Zhang v Misitano; Misitano v Zhang - [2019] NSWCATCD 92 - NSWCATCD 2019 case summary — Zoe

[10]

The background and evidence

The parties entered into a 12-month Residential Tenancy Agreement for premises located at Parramatta. The lease commenced on 19 June 2018, and ended on 18 June 2019.
On or about 11 February 2019, the tenant sent an e-mail to the landlord's agent, Ms He. The Tribunal recites the relevant matters therein as follows: We arrived home last night after a weekend away, and noticed really bad smell as soon as we opened the door to the apartment. At first, we thought it was coming from the drains in the bathroom, as Parramatta suffered a lot of flooding from the storm on Friday night. In an attempt to air the apartment out, I went into the main bedroom to open the window and noticed that the carpet was soaking wet. I double checked and the window was completely closed which I knew was the case as we had been using air conditioning every day during the heat. There does not appear to be any water damage indicating leaks from the walls or the ceiling. I checked the en-suite to see if the water had come through the drains, however the bath mat covers the drains and this was no wet or damp at all. You can see there is water damage to the furniture in the room - the feet of the bedroom, a cube shelving system and tallboy this is not so much. I also had two bags on the floor, which were photographed below - the pink one and the white one next to it, my laptop bag. You can see how wet they were as the pink from the duffle bag had rubbed off from the laptop bag. My laptop was inside the bag and was also completely wet. I have not checked whether it works as yet as I do not want to plug it in until I am sure the cords are completely dry.
The e-mail further said: I did notice that there was residue on the tiles in the hallway near the bedroom door - I mopped the floors before we left on Friday afternoon, so I would imagine this is from overspill of water from the bedroom.
This tenant's evidence is to be contrasted with that of her father, John. His evidence was that the ridging between the tiles and the carpeted services acted as a barrier of sorts to prevent the water escaping from the bedroom [into the en-suite].

[12]

Agent's actions post receipt of the e-mail

Ms He said that she asked the tenant the usual questions about the possible cause of what appeared to be an ingress of water confined to the master bedroom of the unit. The tenant had been away for some of the days prior to the "water ingress" event ["the event"] and there was evidence that during this period that there had been heavy rainfall in the Parramatta region.
Ms He said that the tenant denied she had left any windows open in the 7th floor apartment nor had any taps leaked from the adjoining en-suite area that might have been responsible for the event.
Ms He said that shortly thereafter, by e-mail sent on 18 March 2019, she contacted the building services manager, Krishna. Somewhat belatedly, Krishna provided Ms He with a response to her enquires about the possible cause and effect of the event. The substance of Ms He's e-mail and Krishna's response sent on or around 3 April 2019, is set out in the following terms: Hi Krishna, There was a big storm in February and our tenant for the subject property reported to us, the water damages to the carpet in their master bedroom. I noticed you had inspected the property at the time upon our request to the strata manager, please kindly provide the following information, at your earliest convenience: Which day did you inspect the property? Response Can't remember the exact day but it is after the storm when I receive call. How serious the carpet of the room is damaged by the water, please kindly briefly describe what you see in your inspection: Response According to my observation, I didn't find any water on the carpet, but in some places, I found a little bit of water but not much just a damp of water. Did you see any mould inside the master bedroom? Response I think it is not master bedroom, it's a guest room. No source of mould and all the edges are clear, no source of mould and no source of water damage. Does this apartment have any building leaking issues as far as you are aware? Response No
Although Ms He had not heard from the building manager until 3 April 2019, Ms He received an e-mail from the tenant on 18 February 2019 wherein the tenant remarked as follows: the carpet is dry and does not smell.
Accordingly, Ms He took no further action given the tenant's response around 18 February 2019. Despite what appeared to be an event of almost cataclysmic proportions affecting the entire master bedroom, within a week or so, the carpet was dry and did not smell. The tenant made further comment that the result was achieved without the use of any drying or airing apparatus.

[13]

The evidence

Based on the tenant's e-mail dated 18 February 2019, supported by the somewhat belated, though contemporaneous report from Krishna, the building manager said that: there is no evidence to support a finding that there had been a water ingress event at the unit resulting in the degree of damage to the carpet or the goods had occurred in the apartment.
Notwithstanding the comment in the tenant's email dated 18 February 2019, that the carpet was dry and did not smell, on 26 February 2019, the tenant sent a further e-mail to the agent alerting Ms He to some concerns she had about mould. The e-mail was in the following terms: Hi Helen, I hope you have a good weekend. I was wondering if you had heard anything more about the carpet in my apartment. I have tried calling the building manager over and over again and he won't give me any answers just keeps telling me he has to talk to the builder. Today he is not answering my call at all. The carpet is now dry and does not smell anymore as my partner removed the block on the window last week so we could open it all the way up to let fresh air in. I am not sure if this will be sufficient but I guess there is a chance there will end up being mould under the carpet if it is not cleaned properly, especially underneath where the furniture is. I was wondering if you have heard anything more from the building or strata managers.
The tenant relied upon a series of photos, allegedly taken over the period from 26 February to sometime in April. The photos depicted emerging dark patches on a small cabinet, allegedly mould emerging because of the flooding event. The tribunal noted that the floor covering near the alleged damaged goods looked somewhat different from the carpet in the master bedroom depicted in other photographs relied upon as part of the tenant's evidence.
As to the goods allegedly damaged because of the water ingress, the tenant's father gave evidence that the goods were not removed from the master bedroom after the event. The e-mail from the tenant on 18 February lends support to that position.

[15]

Further e-mail

In around 8 March 2019, the tenant sent a further e-mail to Ms He wherein she expressed her growing concerns about the mould issue in the apartment. The substance of the e-mail is set out in the following terms. Hi Victoria As per advised to you previously, tenant can vacate the property within fixed term lease if the property is proved to be unliveable. Your property might not be the case. We have email records showing we responded to the matter very promptly each time you sent us the email regarding the matter, it was strata management who delay [sic] the action. As this is a strata manager, we have to wait for strata management's action. I believe you would also appreciate that owner has even decided to take action to replace the carpet and clean up the mould on their expense without waiting for the strata management. The quotation has been booked today which means the new carpet can be in place soon. At this stage, owner doesn't think it fair for you to early terminate the fixed term lease without penalty. However, they are happy to $40 per week rental deduction starting from 8-02-2019 until the new carpet is in place for a good faith.
In around 15 March 2019, the landlord, Ms He, the tenant and a mould cleaning tradesperson attended the unit for an inspection. The tribunal remarked that the first inspection occurred somewhat belatedly. Ms He's evidence was that she had sent an e-mail to the tenant on 11 March 2019, seeking access for an inspection to suit her convenience.
However, given that the tenant had advised Ms He that the carpet was dry and that there was no smell, [by 18 February 2019] it seems plausible that there was no sense of urgency about the inspection. Ms He's e-mail sent to the tenant on 15 March 2019, is in the following terms: The trade person confirmed me this morning that he didn't see any mould on the walls and the skirting board, therefore there is no need to do moulding cleaning. If by the time they rip off the current carpet and find mould on the floor, they will clean up the mould before put on the new carpet. …..we would like to friendly advise you that since our trade person has confirmed that there is no mould issue inside the room, you will be liable for the early termination penalty if you decide to terminate your lease early.
At the inspection on 15 March 2019, there were no findings to support a need for any "moulding" cleaning. Ms He suggested that if there was a need to rip up the carpet, they will clean up the mould before put on new carpet
The tribunal notes that the landlord had arranged for a measure and quote for replacement carpet in around 9 March 2019, prior to any formal inspection of the alleged flooding event being conducted by Ms He, the landlord, the tenant and the mould cleaning tradesperson. Carpet Court provided a quote for the replacement of the carpet, at the landlord's direction.
Ms He's evidence was that a new tenant was found for the premises, without the need to replace the carpet.

[20]

The cross-claim - matters for consideration

In the landlord's cross-claim filed on 26 April 2019, Ms He seeks an order that the tenant pays a "break lease" fee for early termination of the residential tenancy agreement during a fixed term. Clause 41 of the lease provides that if the tenant ends the residential tenancy agreement before the end of the fixed term of the agreement, the tenant must pay a break lease fee of 4 weeks, in the second half of the lease term.
After receipt of the findings of the building report dated 7 May 2019, Ms He proposed to resile from the position set out in her e-mail sent to the tenant dated 19 March 2019. Ms He's offer on behalf of the landlord was in the following terms: If you really want to vacate the property before fixed term expiry date, you can vacate when you find your next renting property by providing 3 weeks' notice and provided you allow us to start marketing the property as soon as possible, in which case landlord will waive your early termination penalty. Since the master bedroom is liveable according to today's inspection, landlord will not offer you the rental deduction.
However, the terms of the offer made on 19 March were founded upon a consensus to the effect: the room was liveable as at the date of the inspection. Notwithstanding this, and from Ms He's evidence, as a matter of commerciality, Ms He made the offer on the basis: if you really want to vacate.
The tenant appeared eager to accept those terms. There appeared to be work opportunities in Brisbane for the tenant and her partner that arose around the time of the discussions about her vacating prior to the end of the fixed term.
Ms He altered her position and wished to rely upon the contractual provisions of the lease if the tenant left the premises before the end of the fixed term.
In Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7, the High Court considered whether such a departure from the contractual provision, created by estoppel may be imposed irrespective of a contractual obligation that was supported by consideration. The tribunal recites the relevant part of the decision where Mason CJ and Wilson J said: But there are differences between a contract and an equity created by estoppel. A contractual obligation is created by the agreement of the parties; an equity created by estoppel may be imposed irrespective of any agreement by the party bound. A contractual obligation must be supported by consideration; an equity created by estoppel need not be supported by what is, strictly speaking, consideration. The measure of a contractual obligation depends on the terms of the contract and the circumstances to which it applies; the measure of an equity created by estoppel varies according to what is necessary to prevent detriment resulting from unconscionable conduct.
Ms He's use of the words: "if you really want to vacate" are by no means suggestive that the offer was predicated on the basis that there was a finding that the landlord was in breach, or that the bedroom was otherwise unliveable. At the hearing, Ms He conceded the commerciality of doing so, even if the tenant was relieved of any obligation to pay any early termination penalty.

[23]

Summary of findings

Ms He had not inspected the premises until around 15 March 2019. She had taken no further action after the alleged "flooding" event perhaps comforted by the tenant's email of 18 February 2019, wherein the tenant said words to the effect: "the carpet was dry and there was no smell". The tenant's own evidence suggests that the room was liveable within a short time after the alleged flooding event on 11 February 2019.
The findings of the building manager, followed up somewhat belatedly by Ms He, shares that view. Part of his response is set out below: How serious the carpet of the room is damaged by the water, please kindly briefly describe what you see in your inspection: Response According to my observation, I didn't find any water on the carpet, but in some places, I found a little bit of water but not much just a damp of water. Did you see any mould inside the master bedroom? Response I think it is not master bedroom, it's a guest room. No source of mould and all the edges are clear, no source of mould and no source of water damage. Does this apartment have any building leaking issues as far as you are aware? Response No
The tenant departs from comments made in her earlier e-mail and in around March 2019, says words to the effect: As you are aware, the carpet covering the entire bedroom was soaked and took quite some time to dry out [cf the tenant's email dated 18 February 2019].
The tenant speculated that: I am not sure how the water got in but the only thing I can imagine now given there is no evidence of leaking near the windows, on the walls or the ceiling, is that it has come through the floors.
Ms He's evidence in around 15 March 2019, after conducting an inspection of the unit in the company of the landlord, the tenant and the mould cleaning expert, was that the master bedroom, the subject of the alleged flooding event, was liveable.
The observations and conclusions from the structural and site engineer in May 2019, are in the following terms: There is no visible stain mark representing previous dampness on carpet but not visual signs of current dampness or moulding. The concrete floor is completely dry and there was no sign of water leaking or moulding. There is no sign of deterioration on the carpet strip due to presence of water and there is no sign of moulding. There is no evidence to show water penetrated through the wall or window frame. There are no water stain marks visible on walls under or around window opening. There is some mention in the photographic evidence of some prior damping in the corner of the master bedroom that appeared to be located near the opening of the window.
From the independent evidence available, the tribunal is not satisfied that the premises were unliveable, in part, to make any award for a reduction in rent.
As to any claim for compensation for loss of goods, the tenant on its own evidence must fail. The tribunal makes a finding that there is no evidence of water ingress in the unit occasioned by any landlord breach of its obligations to repair and maintain the premises.
The tenant's speculation of the water ingress rising from the floor of the unit was not consistent with the findings in the building report in early May. There is no visible stain mark representing previous dampness on carpet but not visual signs of current dampness or moulding. The concrete floor is completely dry and there was no sign of water leaking or moulding.

At a glance

Court

Decision date

Source

Judgment (25 paragraphs)

Legislation Cited (3)

Cases Cited (3)